Suppose the government of New Country has fixed the value of its currency, the New Peso, at $1 per New Peso, but the market equilibrium value of the New Peso is $0.50 per New Peso. In order to maintain the official value of the New Peso the Central Bank of New Country must either ________ domestic interest rates, or ________ the supply of international reserves by purchasing New Pesos.
A. lower; decrease
B. raise; increase
C. lower; increase
D. raise; decrease
Answer: D
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Some economists criticize the Lorenz curve because it
A) includes too many things in measuring income, such as food stamps, housing aid, and other government programs. B) does not account for the effect of age on a family's income. C) measures unreported income earned in the underground economy. D) uses after-tax income when pre-tax income is more appropriate.
Disinflation is a reduction in
a. the price level. b. the inflation rate. c. the consumer price index. d. All of the above are correct.
Which of the following is true for a multinational enterprise (MNE)?
A. It usually transfers its liabilities to its foreign subsidiaries. B. It usually provides intangible assets to its affiliates for their usage. C. Its affiliates usually get nearly all of their financing from the direct investment flows. D. Its home-country tax burden is mostly borne by its foreign affiliates.
The short-run supply curve for the perfectly competitive firm is the portion of its
A. MC curve above the AVC curve. B. MC curve above the ATC curve. C. MC curve above the MR curve. D. MC curve above the AFC curve.